v3.26.1
Note 6 - Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

NOTE 6 – FAIR VALUE MEASUREMENTS

 

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of June 30, 2026 and December 31, 2025, respectively. Fair value estimates do not necessarily represent the amounts that may be ultimately realized.

 

June 30, 2026

  

Fair Value

    

Level 1

    

Level 2

    

Level 3

  

Assets:

                                

Cash equivalents

   $ 20,000,000     $ 20,000,000     $ -     $ -  

Digital assets

     11,268,342       11,268,342       -       -  

Embedded derivative related to digital asset receivable

   $ (83,086,868 )   $ -     $ -     $ (83,086,868 )

 

December 31, 2025

  

Fair Value

    

Level 1

    

Level 2

    

Level 3

  

Assets:

                                

Digital assets

   $ 24,439,598     $ 24,439,598     $ -     $ -  

Embedded derivative related to digital asset receivable

   $ (77,893,482 )   $ -     $ -     $ (77,893,482 )

 

Cash equivalents represent the Company’s money market investments. The fair value of these investments is based on the daily market price for identical assets in active markets.

 

The embedded derivative related to the digital asset receivable must be remeasured at fair value each reporting period in accordance with ASC 815, Derivatives and Hedging. Because there is no directly observable market for illiquid, contractually restricted ATH tokens subject to a time-based vesting schedule, the embedded derivative related to digital asset receivable is classified as Level 3. The key unobservable input is the discount applied to reflect the lack of transferability and control during the restriction period. The discount is determined based on the remaining vesting period from each reporting period to the date on which the tokens become fully vested and available to claim, and is reduced ratably at each subsequent measurement date until it reaches zero at full vesting. As of the six months ended June 30, 2026, applied discounts ranged from approximately 20% to 45%. As of December 31, 2025, applied discounts ranged from approximately 30% to 55%. Changes in fair value of the embedded derivative are recognized in the consolidated statements of net loss within "Gains (losses) on digital assets." There were no transfers into or out of Level 3 of the fair value hierarchy during the six months ended June 30, 2026, or the year ended December 31, 2025.